(Translation of Registrant's Name into English)
|
(Address of Principal Executive Offices)
|
99.1 |
Press Release: NICE Exceeds Revenue Guidance with 36% Growth Driven by Continued Strong Cloud Momentum for the Third Quarter 2017, Dated November 2, 2017
|
NICE-SYSTEMS LTD.
|
|||
|
By:
|
/s/ Yechiam Cohen | |
Name: Yechiam Cohen | |||
Title: Corporate VP Finance | |||
Dated: November 2, 2017 |
GAAP
|
Non-GAAP
|
Revenue growth of 36% year-over-year
|
Revenue growth of 36% year-over-year
|
Gross profit increased 30% year-over-year to $207 million
|
Gross profit increased 34% year-over-year to $233 million
|
Operating income of $33 million, down 8% year-over-year
|
Operating income of $78 million, up 22% year-over-year
|
Operating margin of 10.3% compared to 15.2% last year
|
Operating margin of 24.0% compared to 26.7% last year
|
Diluted EPS from continuing operations of $0.42 versus $0.53 last year, down 21% year-over-year
|
Diluted EPS from continuing operations of $0.95 versus $0.83 last year, up 14% year-over-year
|
Cash flow from operations increased 155% year-over-year to $106 million
|
NICE LTD. AND SUBSIDIARIES
|
|||||||
CONSOLIDATED STATEMENTS of INCOME
|
|||||||
U.S. dollars in thousands (except per share amounts)
|
Quarter ended
|
Year to date
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|||||||||||||
Revenue:
|
||||||||||||||||
Product
|
$
|
66,931
|
$
|
68,617
|
$
|
204,124
|
$
|
195,277
|
||||||||
Services
|
159,441
|
155,444
|
476,093
|
459,141
|
||||||||||||
Cloud
|
96,383
|
13,126
|
259,700
|
37,264
|
||||||||||||
Total revenue
|
322,755
|
237,187
|
939,917
|
691,682
|
||||||||||||
Cost of revenue:
|
||||||||||||||||
Product
|
12,944
|
11,815
|
39,668
|
39,786
|
||||||||||||
Services
|
52,618
|
61,122
|
165,892
|
181,412
|
||||||||||||
Cloud
|
49,812
|
5,127
|
139,152
|
13,773
|
||||||||||||
Total cost of revenue
|
115,374
|
78,064
|
344,712
|
234,971
|
||||||||||||
Gross profit
|
207,381
|
159,123
|
595,205
|
456,711
|
||||||||||||
Operating Expenses:
|
||||||||||||||||
Research and development, net
|
45,135
|
33,606
|
130,975
|
100,646
|
||||||||||||
Selling and marketing
|
87,363
|
61,878
|
254,258
|
176,366
|
||||||||||||
General and administrative
|
31,197
|
24,456
|
91,758
|
72,227
|
||||||||||||
Amortization of acquired intangible assets
|
10,566
|
3,155
|
31,319
|
10,412
|
||||||||||||
Total operating expenses
|
174,261
|
123,095
|
508,310
|
359,651
|
||||||||||||
Operating income
|
33,120
|
36,028
|
86,895
|
97,060
|
||||||||||||
Finance and other income (expense), net
|
(4,335
|
)
|
4,968
|
(16,713
|
)
|
11,665
|
||||||||||
Income from continuing operations before tax
|
28,785
|
40,996
|
70,182
|
108,725
|
||||||||||||
Taxes on income
|
2,612
|
8,554
|
6,279
|
15,647
|
||||||||||||
Net income from continuing operations
|
26,173
|
32,442
|
63,903
|
93,078
|
||||||||||||
Discontinued operations
|
||||||||||||||||
Loss from discontinued operations
|
-
|
(2,143
|
)
|
-
|
(2,259
|
)
|
||||||||||
Net loss from discontinued operations
|
-
|
(2,143
|
)
|
-
|
(2,259
|
)
|
||||||||||
Net income
|
$
|
26,173
|
$
|
30,299
|
$
|
63,903
|
$
|
90,819
|
||||||||
Basic earnings per share from continuing operations
|
$
|
0.43
|
$
|
0.54
|
$
|
1.06
|
$
|
1.56
|
||||||||
Basic earnings (loss) per share from discontinued operations
|
$
|
-
|
$
|
(0.03
|
)
|
$
|
-
|
$
|
(0.04
|
)
|
||||||
Basic earnings per share
|
$
|
0.43
|
$
|
0.51
|
$
|
1.06
|
$
|
1.52
|
||||||||
Diluted earnings per share from continuing operations
|
$
|
0.42
|
$
|
0.53
|
$
|
1.03
|
$
|
1.53
|
||||||||
Diluted earnings (loss) per share from discontinued operations
|
$
|
-
|
$
|
(0.03
|
)
|
$
|
-
|
$
|
(0.04
|
)
|
||||||
Diluted earnings per share
|
$
|
0.42
|
$
|
0.50
|
$
|
1.03
|
$
|
1.49
|
||||||||
Weighted average number of shares
|
||||||||||||||||
outstanding used to compute:
|
||||||||||||||||
Basic earnings (loss) per share
|
60,502
|
59,765
|
60,304
|
59,563
|
||||||||||||
Diluted earnings (loss) per share
|
62,220
|
61,119
|
61,979
|
60,930
|
NICE LTD. AND SUBSIDIARIES
|
|||||||
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
|
|||||||
U.S. dollars in thousands (except per share amounts)
|
Quarter ended
September 30,
|
Year to date
September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
GAAP revenues
|
$
|
322,755
|
$
|
237,187
|
$
|
939,917
|
$
|
691,682
|
||||||||
Valuation adjustment on acquired deferred product revenue
|
37
|
75
|
302
|
1,450
|
||||||||||||
Valuation adjustment on acquired deferred service revenue
|
824
|
1,572
|
3,915
|
4,004
|
||||||||||||
Valuation adjustment on acquired deferred cloud revenue
|
3,135
|
1,454
|
5,994
|
4,672
|
||||||||||||
Non-GAAP revenues
|
$
|
326,751
|
$
|
240,288
|
$
|
950,128
|
$
|
701,808
|
||||||||
GAAP cost of revenue
|
$
|
115,374
|
$
|
78,064
|
$
|
344,712
|
$
|
234,971
|
||||||||
Amortization of acquired intangible assets on cost of product
|
(7,059
|
)
|
(6,285
|
)
|
(18,486
|
)
|
(20,167
|
)
|
||||||||
Amortization of acquired intangible assets on cost of services
|
(987
|
)
|
(3,208
|
)
|
(5,354
|
)
|
(6,681
|
)
|
||||||||
Amortization of acquired intangible assets on cost of cloud
|
(11,756
|
)
|
-
|
(33,706
|
)
|
-
|
||||||||||
Valuation adjustment on acquired deferred cost of services
|
371
|
-
|
1,133
|
-
|
||||||||||||
Cost of product revenue adjustment (1,3)
|
(158
|
)
|
(124
|
)
|
(494
|
)
|
(314
|
)
|
||||||||
Cost of services revenue adjustment (1,2,3)
|
(1,903
|
)
|
(1,638
|
)
|
(5,625
|
)
|
(4,847
|
)
|
||||||||
Cost of cloud revenue adjustment (1,2)
|
(649
|
)
|
(85
|
)
|
(2,132
|
)
|
(207
|
)
|
||||||||
Non-GAAP cost of revenue
|
$
|
94,220
|
$
|
66,724
|
$
|
280,048
|
$
|
202,755
|
||||||||
GAAP gross profit
|
$
|
207,381
|
$
|
159,123
|
$
|
595,205
|
$
|
456,711
|
||||||||
Gross profit adjustments
|
25,150
|
14,441
|
74,875
|
42,342
|
||||||||||||
Non-GAAP gross profit
|
$
|
232,531
|
$
|
173,564
|
$
|
670,080
|
$
|
499,053
|
||||||||
GAAP operating expenses
|
$
|
174,261
|
$
|
123,095
|
$
|
508,310
|
$
|
359,651
|
||||||||
Research and development (1,2,3)
|
(2,204
|
)
|
(1,385
|
)
|
(6,651
|
)
|
(4,462
|
)
|
||||||||
Sales and marketing (1,2,3)
|
(5,651
|
)
|
(4,069
|
)
|
(17,160
|
)
|
(11,139
|
)
|
||||||||
General and administrative (1,2,3)
|
(1,640
|
)
|
(5,153
|
)
|
(7,027
|
)
|
(13,246
|
)
|
||||||||
Amortization of acquired intangible assets
|
(10,566
|
)
|
(3,155
|
)
|
(31,319
|
)
|
(10,412
|
)
|
||||||||
Non-GAAP operating expenses
|
$
|
154,200
|
$
|
109,333
|
$
|
446,153
|
$
|
320,392
|
||||||||
GAAP finance & other income (expense), net
|
$
|
(4,335
|
)
|
$
|
4,968
|
$
|
(16,713
|
)
|
$
|
11,665
|
||||||
Amortization of discount on long term debt
|
2,139
|
-
|
11,398
|
-
|
||||||||||||
Realized gain from substantial liquidation of marketable securities
|
-
|
(2,711
|
)
|
-
|
(2,711
|
)
|
||||||||||
Non-GAAP finance & other income (expense), net
|
$
|
(2,196
|
)
|
$
|
2,257
|
$
|
(5,315
|
)
|
$
|
8,954
|
||||||
GAAP taxes on income
|
$
|
2,612
|
$
|
8,554
|
$
|
6,279
|
$
|
15,647
|
||||||||
Tax adjustments re non-GAAP adjustments
|
14,611
|
7,228
|
42,298
|
23,753
|
||||||||||||
Non-GAAP taxes on income
|
$
|
17,223
|
$
|
15,782
|
$
|
48,577
|
$
|
39,400
|
||||||||
GAAP net income
|
$
|
26,173
|
$
|
32,442
|
$
|
63,903
|
$
|
93,078
|
||||||||
Valuation adjustment on acquired deferred revenue
|
3,996
|
3,101
|
10,211
|
10,126
|
||||||||||||
Valuation adjustment on acquired deferred cost of service of revenue
|
(371
|
)
|
-
|
(1,133
|
)
|
-
|
||||||||||
Amortization of acquired intangible assets
|
29,381
|
12,648
|
88,865
|
37,260
|
||||||||||||
Share-based compensation (1)
|
14,016
|
9,458
|
40,900
|
25,714
|
||||||||||||
Re-organization expenses (2)
|
(3,067
|
)
|
1,523
|
(3,067
|
)
|
3,293
|
||||||||||
Acquisition related expenses (3)
|
1,256
|
1,473
|
1,256
|
5,208
|
||||||||||||
Amortization of discount on long term debt
|
2,139
|
-
|
11,398
|
-
|
||||||||||||
Realized gain from substantial liquidation of marketable securities
|
-
|
(2,711
|
)
|
-
|
(2,711
|
)
|
||||||||||
Tax adjustments re non-GAAP adjustments
|
(14,611
|
)
|
(7,228
|
)
|
(42,298
|
)
|
(23,753
|
)
|
||||||||
Non-GAAP net income
|
$
|
58,912
|
$
|
50,706
|
$
|
170,035
|
$
|
148,215
|
NICE SYSTEMS LTD. AND SUBSIDIARIES
|
||||||||
RECONCILIATION OF GAAP TO NON-GAAP RESULTS (continued)
|
||||||||
U.S. dollars in thousands
|
(1
|
)
|
Share-based Compensation
|
|||||||||||||||||
Quarter ended
|
Year to date
|
||||||||||||||||||
September 30,
|
September 30,
|
||||||||||||||||||
2017
|
2016
|
2017
|
2016
|
||||||||||||||||
Cost of product revenue
|
$
|
(158
|
)
|
$
|
(114
|
)
|
$
|
(494
|
)
|
$
|
(304
|
)
|
|||||||
Cost of service revenue
|
(1,903
|
)
|
(1,630
|
)
|
(5,625
|
)
|
(4,570
|
)
|
|||||||||||
Cost of cloud revenue
|
(649
|
)
|
(85
|
)
|
(2,132
|
)
|
(231
|
)
|
|||||||||||
Research and development
|
(2,204
|
)
|
(1,383
|
)
|
(6,651
|
)
|
(3,541
|
)
|
|||||||||||
Sales and marketing
|
(5,576
|
)
|
(4,008
|
)
|
(17,085
|
)
|
(10,441
|
)
|
|||||||||||
General and administrative
|
(3,526
|
)
|
(2,238
|
)
|
(8,913
|
)
|
(6,627
|
)
|
|||||||||||
$
|
(14,016
|
)
|
$
|
(9,458
|
)
|
$
|
(40,900
|
)
|
$
|
(25,714
|
)
|
(2
|
)
|
Re-organization expenses
|
|||||||||||||||||
Quarter ended
|
Year to date
|
||||||||||||||||||
September 30,
|
September 30,
|
||||||||||||||||||
2017
|
2016
|
2017
|
2016
|
||||||||||||||||
Cost of service revenue
|
$
|
-
|
$
|
(1
|
)
|
$
|
-
|
$
|
(270
|
)
|
|||||||||
Cost of cloud revenue
|
-
|
-
|
-
|
24
|
|||||||||||||||
Research and development
|
-
|
-
|
-
|
(896
|
)
|
||||||||||||||
Sales and marketing
|
-
|
-
|
-
|
(150
|
)
|
||||||||||||||
General and administrative
|
3,067
|
(1,522
|
)
|
3,067
|
(2,001
|
)
|
|||||||||||||
$
|
3,067
|
$
|
(1,523
|
)
|
$
|
3,067
|
$
|
(3,293
|
)
|
(3
|
)
|
Acquisition related expenses
|
|||||||||||||||||
Quarter ended
|
Year to date
|
||||||||||||||||||
September 30,
|
September 30,
|
||||||||||||||||||
2017
|
2016
|
2017
|
2016
|
||||||||||||||||
Cost of product revenue
|
$
|
-
|
$
|
(10
|
)
|
$
|
-
|
$
|
(10
|
)
|
|||||||||
Cost of service revenue
|
-
|
(7
|
)
|
-
|
(7
|
)
|
|||||||||||||
Research and development
|
-
|
(2
|
)
|
-
|
(25
|
)
|
|||||||||||||
Sales and marketing
|
(75
|
)
|
(61
|
)
|
(75
|
)
|
(548
|
)
|
|||||||||||
General and administrative
|
(1,181
|
)
|
(1,393
|
)
|
(1,181
|
)
|
(4,618
|
)
|
|||||||||||
$
|
(1,256
|
)
|
$
|
(1,473
|
)
|
$
|
(1,256
|
)
|
$
|
(5,208
|
)
|
NICE LTD. AND SUBSIDIARIES
|
||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||||
U.S. dollars in thousands
|
September 30,
|
December 31,
|
|||||||
2017
|
2016
|
|||||||
Unaudited
|
Unaudited
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
320,929
|
$
|
157,026
|
||||
Short-term investments
|
53,675
|
30,287
|
||||||
Trade receivables
|
195,346
|
260,220
|
||||||
Prepaid expenses and other current assets
|
75,173
|
57,966
|
||||||
Current assets of discontinued operations
|
2,009
|
3,734
|
||||||
Total current assets
|
647,132
|
509,233
|
||||||
LONG-TERM ASSETS:
|
||||||||
Long-term investments
|
119,472
|
98,726
|
||||||
Property and equipment, net
|
114,654
|
87,678
|
||||||
Deferred tax assets
|
15,706
|
14,093
|
||||||
Other intangible assets, net
|
557,387
|
618,735
|
||||||
Goodwill
|
1,302,756
|
1,284,710
|
||||||
Other long-term assets
|
18,845
|
18,701
|
||||||
Total long-term assets
|
2,128,820
|
2,122,643
|
||||||
TOTAL ASSETS
|
$
|
2,775,952
|
$
|
2,631,876
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Current maturities of long term loan
|
$
|
-
|
$
|
21,164
|
||||
Trade payables
|
27,163
|
25,634
|
||||||
Current portion of deferred revenues and advances from customers
|
201,898
|
149,801
|
||||||
Accrued expenses and other liabilities
|
275,921
|
273,134
|
||||||
Current liabilities of discontinued operations
|
176
|
3,077
|
||||||
Total current liabilities
|
505,158
|
472,810
|
||||||
LONG-TERM LIABILITIES:
|
||||||||
Deferred revenues and advances from customers
|
42,855
|
22,710
|
||||||
Deferred tax liabilities
|
98,403
|
146,952
|
||||||
Long-term debt
|
445,574
|
444,016
|
||||||
Other long-term liabilities
|
28,618
|
34,056
|
||||||
Total long-term liabilities
|
615,450
|
647,734
|
||||||
SHAREHOLDERS' EQUITY
|
1,655,344
|
1,511,332
|
||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
2,775,952
|
$
|
2,631,876
|
||||
NICE LTD. AND SUBSIDIARIES
|
|||||||
CONSOLIDATED CASH FLOW STATEMENTS
|
|||||||
U.S. dollars in thousands
|
Quarter ended
|
Year to date
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|||||||||||||
Operating Activities
|
||||||||||||||||
Net income
|
$
|
26,173
|
$
|
30,299
|
$
|
63,903
|
$
|
90,819
|
||||||||
Adjustments to reconcile net income to net cash provided by operating activities
|
||||||||||||||||
Depreciation and amortization
|
39,153
|
16,932
|
115,309
|
50,332
|
||||||||||||
Stock based compensation
|
14,016
|
9,457
|
40,900
|
25,714
|
||||||||||||
Amortization of premium and discount and accrued interest on marketable securities
|
273
|
714
|
424
|
2,355
|
||||||||||||
Deferred taxes, net
|
(12,646
|
)
|
(4,815
|
)
|
(34,188
|
)
|
(17,512
|
)
|
||||||||
Changes in operating assets and liabilities:
|
||||||||||||||||
Trade Receivables
|
10,930
|
(13,691
|
)
|
72,810
|
40,678
|
|||||||||||
Prepaid expenses and other current assets
|
(32,264
|
)
|
(1,340
|
)
|
(40,251
|
)
|
3,428
|
|||||||||
Trade payables
|
7,605
|
(372
|
)
|
636
|
4,917
|
|||||||||||
Accrued expenses and other current liabilities
|
52,829
|
18,890
|
17,228
|
(29,548
|
)
|
|||||||||||
Deferred revenue
|
1,660
|
(13,659
|
)
|
65,176
|
16,196
|
|||||||||||
Long term liabilities
|
(3,583
|
)
|
172
|
(5,189
|
)
|
101
|
||||||||||
Gain on sale and loss on disposal of discontinued operations
|
-
|
1,990
|
-
|
1,990
|
||||||||||||
Realized gain on marketable securities
|
-
|
(2,817
|
)
|
-
|
(3,366
|
)
|
||||||||||
Amortization of discount on long term debt
|
2,139
|
-
|
11,398
|
-
|
||||||||||||
Other
|
(461
|
)
|
(339
|
)
|
(926
|
)
|
(283
|
)
|
||||||||
Net cash provided by operating activities
|
105,824
|
41,421
|
307,230
|
185,821
|
||||||||||||
Investing Activities
|
||||||||||||||||
Purchase of property and equipment
|
(7,899
|
)
|
(7,025
|
)
|
(31,422
|
)
|
(18,165
|
)
|
||||||||
Purchase of Investments
|
(53,791
|
)
|
-
|
(96,017
|
)
|
(47,221
|
)
|
|||||||||
Proceeds from Investments
|
15,610
|
340,487
|
51,626
|
420,965
|
||||||||||||
Capitalization of software development costs
|
(7,730
|
)
|
(1,948
|
)
|
(21,046
|
)
|
(4,706
|
)
|
||||||||
Repayment from sale of discontinued operations
|
-
|
(1,990
|
)
|
-
|
(1,990
|
)
|
||||||||||
Payments for business acquisitions, net of cash acquired
|
(37,880
|
)
|
-
|
(37,880
|
)
|
(151,328
|
)
|
|||||||||
Net cash provided by (used in) investing activities
|
(91,690
|
)
|
329,524
|
(134,739
|
)
|
197,555
|
||||||||||
Financing Activities
|
||||||||||||||||
Proceeds from issuance of shares upon exercise of share options
|
4,412
|
8,092
|
16,787
|
21,261
|
||||||||||||
Purchase of treasury shares
|
(4,267
|
)
|
(2,924
|
)
|
(20,314
|
)
|
(35,017
|
)
|
||||||||
Dividends paid
|
-
|
(9,568
|
)
|
(9,637
|
)
|
(28,604
|
)
|
|||||||||
Capital Lease payments
|
-
|
(515
|
)
|
-
|
(695
|
)
|
||||||||||
Repayment of long term debt
|
-
|
-
|
(260,000
|
)
|
-
|
|||||||||||
Proceeds from issuance of exchangeable notes
|
-
|
-
|
260,842
|
-
|
||||||||||||
Net cash provided by (used in) financing activities
|
145
|
(4,915
|
)
|
(12,322
|
)
|
(43,055
|
)
|
|||||||||
Effect of exchange rates on cash and cash equivalents
|
2,028
|
(912
|
)
|
3,734
|
(127
|
)
|
||||||||||
Net change in cash and cash equivalents
|
16,307
|
365,118
|
163,903
|
340,194
|
||||||||||||
Cash and cash equivalents, beginning of period
|
304,622
|
301,007
|
157,026
|
325,931
|
||||||||||||
Cash and cash equivalents, end of period
|
$
|
320,929
|
$
|
666,125
|
$
|
320,929
|
$
|
666,125
|
||||||||
*Certain comparative figures have been reclassified to conform to the current year presentation. |